Ranked-by-risk-involved.pdf

1. Cryptocurrency Trading
Risk Level: Extremely High
Description: Trading volatile digital assets like Bitcoin or Ethereum, often with high leverage.
The risks of extreme price volatility combine with regulatory turbulence along with security breach incidents that include exchange hacks.

2. Options Trading
Risk Level: Very High
Contracts with predefined pricing conditions that enable purchase or sale of assets make up this category.
Options trading presents three primary risks which include unlimited seller losses and complex strategies and time-related decay.

3. Futures Trading
Risk Level: High
The mandatory contract allows users to purchase or sell asset types (including commodities or indices) at pre-specified future dates.
The main risks involved with this strategy consist of margin calls while commodity-specific events and leverage elevation.

4. Intraday Commodity Trading
Risk Level: High
Description: Short-term trading of commodities (e.g., crude oil, gold) within a single day.
The main risks include market slippage occurring in low-liquidity conditions and geopolitical market sensitivities.

5. Forex Trading
Risk Level: High
Description: Trading currency pairs (e.g., EUR/USD) with high leverage.
The main dangers during this trading method include losses that occur from leveraged investments and the rapid changes that result from central bank policy adjustments.

6. Intraday Equity Trading
Risk Level: High
Description: Buying/selling stocks within the same trading day, often with margin (leverage).

Key Risks:
People who use margin face a risk of their investments increasing or decreasing at an amplified rate because of the leverage factoring (for example 5x leverage transforms a 2% loss into a 10% loss).

The market reacts strongly through wild price fluctuations when companies release earnings reports as well as when sector trends shift.

Multiple risks from emotional decision-making tend to occur because traders must make swift decisions during intraday equity transactions.
The fast-changing market prices can cause orders to execute during moments that result in unfavorable price points.

Risk Management Tips:
You should implement strict stop-loss orders that operate between 1% and 2% risk per trading interaction.
Stay away from using excessive leverage while choosing only highly liquid stocks from large-cap companies.
Closing all market positions before market hours ends helps to prevent overnight price gaps.

7. Margin Trading Facility (MTF)
Risk Level: Moderate to High
Clients obtain funds from a lender to invest in stock with a leverage ratio between 2 to 5 times.
Trading with margin creates three critical risks that include: margin calls, forced liquidation and interest expenses.

8. Structured Products
Risk Level: Moderate to High
The categorization includes pre-packaged investment instruments which may consist of equity-linked notes among others.
The Margin Trading Facility (MTF) poses three critical risks which include counterparty risk together with complexity and constraints regarding liquidity.

9. Swing Trading
Risk Level: Moderate
Swing traders maintain their positions for a period spanning from days to weeks with the goal of recognizing market movements.
The two main risks affiliated with overnight gaps and emotional trader biases exist in this trading technique.

10. ETFs (Exchange-Traded Funds)
Risk Level: Low to Moderate
The portfolio consists of various assets which trade similarly to stocks in stock markets.
Investors need to be aware of two main risks associated with ETFs that include tracking error and liquidity risks affecting niche ETFs.

11. Cash Trading
Risk Level: Low
Buying and selling securities using own funds represents a risk-low activity because it does not involve leverage.
The main risks in this strategy include market fluctuations as well as the economical opportunity cost.

Risk Management Summary
–Highest Risk: Cryptocurrencies, options, futures (leverage + volatility).
The risk level of ETFs alongside swing trading belongs to the moderate category.
The most capital-preserved method for trading involves cash together with debt securities.
 Some useful Tips:
The 1% rule sets a threshold that every trading risk must fall below or equal to 1% of capital.

Develop systematic strategies for using stop-loss and take-profit orders.
It is essential to prevent using too much leverage while trading in MTF and futures.

Strategic position sizing alongside stop-loss orders enables investors to control loss potential.
Diversification of different assets operates as a risk mitigation strategy for unsystematic risks.
When market volatility rises traders should protect their positions through derivative instruments like protective puts.

Look at the risk management guides found on the website at https://groww.in/blog/risk-management-in-intraday-trading for strategies related to intraday equity.